Lucid’s ‘most affordable’ Air not such a bargain
The RWD version’s discount has long been trailed as a selling point. But that was before price cuts elsewhere
California EV pureplay Lucid last week launched a cheaper version of its Air Pure sedan, hoping to stimulate demand with its most affordable vehicle yet. The problem is that price cuts by Lucid and its competitors have left it not looking particularly cheap.
The new Lucid Air Pure RWD starts at $77,400 before tax and incentives, meaning it is priced $10,000 below the original price of the Air Pure AWD. But it is only $5,000 below the revised price tag for the AWD after downward revisions in August.
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Lucid cut the sticker price on base model Air Pure AWD to $82,400 — as well as reducing the Air Touring by $12,400 to $95,000, and the Air Grand Touring from $139,000 to $125,600. And this much narrower gap between the AWD and new RWD might call into question Luci’s ambitions for the latter to move the dial on sales.
Despite some commentators labelling the release as another price cut in the style of the August reductions, Lucid has long earmarked the release of a more keenly RWD option as a key driver to help increase deliveries in the second half of the year.
“We expect deliveries to be up the back half of the year, and we expect Q4 to be our largest quarter of the year as we ramp sales to customers in the government of Saudi Arabia, ramp Pure all-wheel drive and introduce our most affordable variant, Pure rear-wheel drive in September,” CFO Sherry House told analysts in August. So RWD was always planned to be cheaper, albeit it is also slightly late.
The new “affordable” Air sedan will still set the buyer back around the same as Rivian’s R1S and R1T, albeit neither are in the sedan segment. The Sino-Swedish Polestar 2 electric sedan, which shares a performance characterisation with Lucid’s models, still comes in cheaper than the new RWD offering, even with its maximum optional fittings.
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Lucid’s director of executive recruitment James Tucker calls the move “good news” for customers. But analysts are concerned if it will be enough to reignite appetite for Lucid's offerings. “It got that first wave of enthusiast buyers to add to the mix and they have got to rekindle that demand now,” says James Picariello, an automotive analyst at bank BNP Paribas.
Price reductions seen across the industry, most notably by market leader Tesla, will pose a challenge for relatively premium-priced start-ups such as Lucid that are trying to ramp both production and sales.
“Tesla is now selling the Model 3 at $9,000 below the average new vehicle price and they are just barely going to hit their estimated targets for the year. There was no way anyone — including Tesla — forecasted the kind of price declines they have seen on new and used vehicles just to hit quota,” says Peter Ceccarelli of consultancy Free Power.
For Lucid, where per-unit margins in Q2 are estimated by financial services firm Cantor Fitzgerald to be as low as -268pc, US BEV price erosion just makes its mountain that bit steeper.